Fight Fire With Fire?

Special to washingtonpost.com's Think Tank Town
Monday, April 30, 2007; 12:00 AM

Will climate change doom humanity to an existence mimicking Dante's Inferno? Will nuclear proliferation threaten humanity with annihilation as depicted in Dr. Strangelove? An increasing number of pundits, policymakers and even environmentalists believe that nuclear energy can save us from massive death by climate change and will not lead to massive destruction by nuclear war. (Nuclear fuel making technologies can also be used to produce explosive material for nuclear weapons.) But as I wrote in a new Council on Foreign Relations report, Nuclear Energy: Balancing Benefits and Risks, this view oversells the contribution nuclear energy can make to strengthen energy security and reduce global warming while downplaying the dangers associated with this energy source.

First, what can nuclear energy really do to free the United States from the clutches of corrupt oil-producing countries? The United States generates about twenty percent of its electricity from nuclear energy and only three percent from oil. Oil mainly fuels cars and trucks. Presently, the United States imports about two-thirds of its oil. While nuclear energy is now used for electric power generation and not for transportation, perhaps over many decades, it could power vehicles through production of hydrogen for fuel cells or electricity for plug-in hybrid cars and trucks. But until transportation is overhauled away from gasoline powered internal combustion engines, nuclear energy cannot wean the United States off oil from unstable parts of the world.

Can nuclear energy, which emits very few greenhouse gases, at least further clean up the atmosphere and reduce global warming by displacing coal-fired power plants? Coal-fired plants produce half of the U.S.'s electricity. It is no surprise that the United States relies so heavily on coal. America is the Saudi Arabia of coal reserves with an estimated supply of 250 years based on current demand. Still, nuclear power plants' operating costs compete favorably with coal and other power sources. But nuclear power's construction costs are much higher than coal's capital costs.

With the financial deck stacked against construction of new nuclear reactors, industry representatives have lobbied for and received billions of dollars of additional subsidies to try to stimulate growth. These subsidies have yet to trigger the long-awaited nuclear renaissance. A new economic approach, however, might stimulate some growth in nuclear energy.

Faced with an American awakening to the catastrophes that could stem from climate change, many senators and congressmen are expressing interest in enacting regulatory controls on greenhouse gases. Five bills now before Congress favor a cap-and-trade system that would cap the amount of allowable emissions of greenhouse gases and encourage electrical power producers to trade emissions permits to stay below the cap.

While a similar approach begun in 1990 has successfully curtailed power plant emissions that cause acid rain, the problem of greenhouse gas emissions is far more massive. Many economists are concerned that a greenhouse gas cap-and-trade system could become riddled with loopholes, and they instead prefer a greenhouse gas consumption tax. Talk of new taxes, however, is a third rail of politics. To make the consumption tax palatable, Congress could make it revenue neutral. For instance, proceeds from the tax could alleviate the financial burden on the poor and stimulate research in innovative energy technologies.

Either a cap-and-trade system or a greenhouse gas tax would begin to set a price on the environmental damage from climate change. Such a price would leverage market forces to make low- or no-greenhouse gas emission energy sources such as nuclear, wind and solar cost competitive with high-greenhouse gas emission sources such as coal and oil.

But even the proper greenhouse gas price would not allow nuclear energy primarily to pull humanity's feet from the global fire. Nuclear energy would probably show some growth but not on the scale needed to displace hundreds of coal-fired plants throughout the world. In the coming years, China, India, and the United States plan to build more than 800 coal-fired plants. If these plants do not capture greenhouse gases, they would swamp by more than five times the greenhouse gas savings from the Kyoto Protocol.

As a practical matter, building nuclear plants at the rapid pace required to match construction of the coal plants would initially tend to drive up costs and scare off investors. Also, only a few companies in the world can now make reactor-quality steel, concrete, and other vital components. And a rush to build would aggravate shortages in skilled workers and qualified engineers to safely run the plants.

Nonetheless, nuclear energy will play an important part in constraining greenhouse gas emissions. The United States and other countries should welcome even modest growth in nuclear energy provided they can successfully manage the risks of safety, security, radioactive waste disposal and nuclear proliferation.